Why Sebi RIA?

Hiring a SEBI Registered Investment Adviser

Hiring a financial planner is an important decision of your life. This decision is made on the foundation of trust where you are prepared to share your finances with an objective that you will be given the right guidance to build a secure financial future. But this was more difficult than written considering the lack of accountability among advisors and mis-selling prevalent in the industry.

Change happens for good and so it did in financial services industry. SEBI rolled out Investment Adviser Regulations 2013 to govern all investment advisors in the country. The objective of these regulations is to differentiate between advisors interested in giving advice suitable to their clients FROM advisers working for product manufacturers. Any finance professional (financial planner, advisor, financial coach, agent or whatever name they use) who is giving investment advice (it too has a very broad definition to include all elements of advice) to their clients has to first register with SEBI as “Investment Adviser”. Once registered, The Investment Advisers then work under a standardized operating structure so that the matters related to risk profiling or performance reporting can be deal with diligently. For investors like you, this is a welcome step as you can expect a fair and transparent advice which solely takes your interest on priority from a SEBI Registered “Investment Adviser”.

Here is what differentiates “Investment Advisers” from advisors who will stay unregulated:

1. Education & Experience - Firstly to become an Investment Adviser SEBI has laid down stringent guidelines on education and experience of the candidate/entity registering as Investment Adviser. A mandatory certification from NISM or any other organization accredited by NISM or a graduate with a five years’ experience in Financial Advisory/PG in Finance etc.. is the minimum criteria in the regulation.

2. Fiduciary Duty: This is going to be the biggest differentiator. A SEBI registered Investment Adviser have a fiduciary duty of working towards your interest as he/she can be held liable for any breach of trust or for rendering any incorrect advise. This ensures your interest will always be kept on priority while rendering you investment advisory or financial planning services.

3. Compliance– Investment Advisers have to strictly adhere to compliance. Record maintenance of entire process of Investment advice for 5 years, annual auditing of books of accounts, open to regulators audit are compliance which they have to meet to stay in the business. What this means is that a registered adviser is regulated at all level of communication with its clients to ensure the suitability of advice is followed.

4. Disclosures: There are host of disclosures which Investment Advisers have to provide to their client before any engagement can be initiated. These pertains to the advisory business, fees and scope of services, conflict of interest if any, remuneration apart from the fees charged, tie-ups with other entities and many others which have a probability of raising any element of conflict of interest. The benefit of these disclosures is that as a client you have full awareness about your adviser and his remuneration before you hire him/her. Thus, in first meeting itself you are able to differentiate an adviser from a product distributor.

5. Global Standard- The Investment Adviser regulations are in line with regulations prevalent in countries like US, UK or any other, in fact more stringent at many instances. Thus, these regulations are of highly global standard.

6. Code of Conduct- There is going to be strict adherence to code of conduct laid down by SEBI. These are:

1. Honesty and fairness
An investment adviser shall act honestly, fairly and in the best interests of its client sand in the integrity of the market.

2. Diligence
An investment adviser shall act with due skill, care and diligence in the best interests of its clients and shall ensure that its advice is offered after thorough analysis and taking into account available alternatives.

3. Capabilities
An investment adviser shall have and employ effectively appropriate resources and procedures which are needed for the efficient performance of its business activities.

4. Information about clients
An investment adviser shall seek from its clients, information about their financial situation, investment experience and investment objectives relevant to the services to be provided and maintain confidentiality of such information.

5. Information to its clients
An investment adviser shall make adequate disclosures of relevant material information while dealing with its clients.

6. Fair and reasonable charges
An investment adviser advising a client may charge fees, subject to any ceiling as may be specified by the Board, if any. The investment adviser shall ensure that fees charged to the clients is fair and reasonable.

7. Conflicts of interest
An investment adviser shall try to avoid conflicts of interest as far as possible and when they cannot be avoided, it shall ensure that appropriate disclosures are made to the clients and that the clients are fairly treated.

8. Compliance
An investment adviser including its representative(s) shall comply with all regulatory requirements applicable to the conduct of its business activities so as to promote the best interests of clients and the integrity of the market.

9. Responsibility of senior management
The senior management of a body corporate which is registered as investment adviser shall bear primary responsibility for ensuring the maintenance of appropriate standards of conduct and adherence to proper procedures by the body corporate.

So Why Fee Only RIA?

For you, hiring a SEBI registered Investment Adviser mean a surety that the advice delivered to you is being monitored at all levels of communication and so the adviser will work on your suitability not his/her. But being a fee only Investment Adviser means eliminating even a small element of conflict of interest which can arise and so the advice is truly independent & unbiased. There is no minimums criteria but a strong adherence to fiduciary standard by law and Responsiveness for all your queries, is what you get when you are associated with us.

Special Needs Financial Planning
Special Needs Financial Planning
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